A Mixed Day so Far as Markets Expect FOMC Meeting

Its been a mixed day so far in the stocks and FX market as the markets search for direction ahead of the FOMC statement on Sep 21. The big mover of the day so far has been the Japanese yen. It strengthened initially as the Nikkei took a tumble but it began to lose steam as the Nikkei recovered. The news that some members of the BOJ are in favour of further easing. How true this news is anybody’s guess as rumors are one of the primary drivers of market volatility and liquidity. The USD/JPY sits on a 80 pip range already today though the previous high around 104 is expected to cap its further moves. The Nikkei closed down -0.69% at 16,614.24.

The other Asian and Eurpean markets have taken a similar approach during early trading, as far as the direction is concerned. All the markets seem to be settling down into a range and we expect this to continue into next week as well. The European markets have drifted down while the Japanese and Chinese markets finished lower.

The commodities have been in a range since yesterday. Gold has its range top at 1323 (which it has been trying to break for the past few hours) while the range bottom comes in at 1313. Even if the range top breaks, we expect that the previous high at 1330 will continue to hold range for today. Fundamentally, the commodities are expected to stay firm with the firm data out of China over the past week.

Crude oil is also in a tight range between 45 and 46 since yesterday but for oil, this range is expected to be broken when the crude oil inventory data is released from the US today at 14:30 GMT. The data is expected to be 2.8M barrels , a big jump from the previous data of -14.5M barrels.

Of all the commodities, Silver has been the most active since yesterday night. It had a strong base at around 18.75 and from there it has launched itself upward and is now heading towards the resistance at 19.23. Silver has been in good demand lately and has experience a lot of volatility and has basically taken over the limelight from gold in recent weeks.

Expect some more range trading for the rest of the week, with bearish bias, as the markets await the FOMC statement.